How can I create a boolean mesh to replicate the movement of a milling bit?
This might not be quite what you're looking for, but come back (comment) if it isn't....

I'm starting with a 32-sided cylinder, Z-up, rotated RZ in edit mode by 360/64, so its flat sides face down X and Y.


Cut across the ends of the cylinder, joining the faces facing Y and -Y, preparatory to making a central section (see below)
Cut in circumferences, and SShiftZ scale them in  XY to create the profile.
Split a copy of the bit as shown. 
Make a central section made by duplicating ShiftD the X - central face-loop, and flattening its front and back sides by scaling to 0 in X about an unscaled vertex on each side. (Set pivot to 'active', and select an unscaled vertex last)
Make front and back sections made by taking the remaining faces, and extruding their inner edge-loops to X=0, so they meet in the middle. (E, followed by SX0, with pivot set back to '3D cursor' at the origin). Split those off to new objects, as before.
Create the curve which will be the path of your bit.
Assign an Array modifier to the central section, Relative offset to 1 in X, count set to 'Fit Curve', and Start and End Caps set to the other sections.
Assign a Curve modifier to the array, down X. (It's easier if the origin of the curve coincides with the origin of the central section)




Now you could use the result in a Boolean, or turn it inside out, remove the top face, and model with it.